**PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION**
Dear Victoria and Jonathan,
I am writing to provide you with our quarterly status report on the patent infringement action captioned *Genome Dx Therapeutics Inc. v. Helios Precision Diagnostics, Inc.*, Case No. 3:25-cv-01847-JWL, pending in the United States District Court for the Northern District of California before the Honorable Jessica W. Langston. This report covers activity from July 1 through September 30, 2025, and supplements the updates we have provided on an ongoing basis throughout the quarter.
As a reminder, this action involves three patents-in-suit: U.S. Patent No. 10,438,271 (the "'271 Patent"), U.S. Patent No. 11,204,893 (the "'893 Patent"), and U.S. Patent No. 11,891,647 (the "'647 Patent"). The accused product is Helios's ProstaSignal™ Genomic Classifier.
The following is a detailed summary organized by topic.
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**1. Pleadings Phase — Completion**
The pleadings phase is now complete.
As previously reported, Helios, represented by Ridgecrest Durneval LLP (lead partner Marcus Pellegrini), filed its Answer and Counterclaims on May 12, 2025. Helios's counterclaims assert invalidity under 35 U.S.C. §§ 101, 102, and 103; non-infringement; and unenforceability. On the invalidity front, Helios's theories include: (a) patent-eligibility challenges under § 101 citing *Mayo Collaborative Services v. Prometheus Laboratories* and *Association for Molecular Pathology v. Myriad Genetics*; (b) anticipation of Claims 1 and 3 of the '271 Patent under § 102 by Nakamura et al. (U.S. Patent No. 9,617,340); and (c) obviousness under § 103 in view of combinations of Nakamura, Gagnon (WO 2018/065413), Thornberry et al. (*Journal of Computational Oncology*, Vol. 14, No. 3, pp. 287–301, March 2015), and Klein et al. (*European Urology*, Vol. 66, No. 1, pp. 45–52, 2014). Helios's non-infringement defense focuses on alleged differences between ProstaSignal™'s 24-gene panel and gradient-boosted decision tree classifier versus the methods claimed in the patents-in-suit.
GenomeDx filed its Answer to Helios's Counterclaims on May 30, 2025, denying all counterclaims and asserting affirmative defenses.
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**2. Initial Case Management Conference and Scheduling Order**
The Initial Case Management Conference was held on June 18, 2025 before Judge Langston. The Court issued a Scheduling Order setting the following key dates:
- **Fact discovery close:** March 6, 2026 - **Expert reports due:** May 15, 2026 - **Rebuttal expert reports due:** July 10, 2026 - **Markman hearing:** September 18, 2026 - **Trial:** February 2027
Magistrate Judge David R. Cabrera has been assigned to handle discovery disputes. I would note that this is a relatively compressed schedule for a case of this complexity. The team is managing workstreams accordingly and is well-positioned to meet all deadlines.
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**3. Initial Disclosures**
The parties exchanged initial disclosures under Federal Rule of Civil Procedure 26(a)(1) on July 14, 2025.
GenomeDx identified 11 custodians, including Dr. Rajan Mehta (CTO and named inventor on all three patents-in-suit), Dr. Kevin Ostrowski (VP intellectual Property and named inventor on the '647 Patent), Dr. Miriam Langford (CEO), Victoria Sung (General Counsel), and seven additional R&D and commercial employees.
Helios identified its key personnel, including CEO Dr. Nathan Ashford, CSO Dr. Elaine Kossack, Senior Scientist Dr. Anton Rykov (who led ProstaSignal™ algorithm development), VP Commercial Derek Mallinson, and General Counsel Sara Whitmore.
GenomeDx's initial disclosures also included identification of damages categories: a lost-profits theory based on GenomeDx's approximately 68% current market share (down from approximately 74% prior to the ProstaSignal™ launch), as well as an alternative reasonable-royalty theory referencing the Veridian Molecular Labs license as a comparable.
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**4. Exchange of Proposed Claim Construction Terms**
On August 4, 2025, the parties exchanged proposed claim terms for construction pursuant to the Patent Local Rules. Key disputed terms include:
- **"trained machine-learning classifier"** ('271 Patent) - **"random-forest classifier"** ('893 Patent) - **"panel of at least 22 genes selected from a predefined gene set"** ('271 Patent) - **"risk category"** ('647 Patent) - **"composite risk metric"** ('647 Patent)
Two of these terms are particularly critical to the case. First, the construction of **"trained machine-learning classifier"** in the '271 Patent is central to infringement. GenomeDx's position is that this term is broad enough to encompass Helios's gradient-boosted decision tree classifier. Helios will likely argue for a narrow construction intended to exclude its product. Second, the term **"random-forest classifier"** in the '893 Patent is central to the question of literal infringement versus infringement under the doctrine of equivalents for that patent, because ProstaSignal™ uses a gradient-boosted decision tree rather than a random forest.
The team has prepared an internal Preliminary Claim Construction Memorandum analyzing our proposed constructions and anticipating Helios's positions. I would be happy to walk through this document in detail on a call at your convenience. The Joint Claim Construction and Prehearing Statement will be developed over the coming months for filing in advance of the September 18, 2026 Markman hearing.
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**5. Helios's Motion to Dismiss Under § 101**
On September 15, 2025, Helios filed a Motion to Dismiss Counts II and III of our Complaint — the counts asserting the '893 and '647 Patents — under 35 U.S.C. § 101 (patent eligibility). Helios argues that the asserted claims of these patents are directed to abstract ideas — specifically, mathematical algorithms applied to natural phenomena (gene expression levels) — without an inventive concept, citing *Mayo Collaborative Services v. Prometheus Laboratories* and *Association for Molecular Pathology v. Myriad Genetics*.
GenomeDx's opposition brief is due **November 3, 2025**, and the team is actively drafting. Our primary arguments are as follows: (1) the asserted claims recite specific, concrete diagnostic improvements — including RNA extraction from formalin-fixed, paraffin-embedded (FFPE) samples, reference-gene normalization, and specific classifier training methodology — rather than abstract ideas; (2) § 101 challenges are premature at the pleading stage before claim construction has been conducted; and (3) the '271 Patent survived identical § 101 scrutiny during prosecution, where the Examiner withdrew the rejection after GenomeDx amended the claims to add specific technical steps. Helios's reply brief will be due November 17, 2025.
**Assessment:** We believe this motion is unlikely to succeed at this stage. Courts in the Northern District of California have generally been reluctant to resolve § 101 patent-eligibility issues on a motion to dismiss in the life-sciences diagnostic context before claim construction. However, even if the motion is denied, Helios will almost certainly renew these arguments at summary judgment. It is also worth noting that Helios did not challenge the '271 Patent under § 101 in this motion, likely because the prosecution history shows the Examiner already considered and rejected the § 101 argument after GenomeDx's claim amendments.
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**6. E-discovery Preparation**
We have engaged Canfield Document Solutions LLC (project manager: Sandra Neville) to manage e-discovery. Canfield has collected approximately 482,000 documents (1.7 TB) from GenomeDx's 11 custodians. Document review is proceeding using Canfield's RevealIQ platform with predictive coding (TAR 2.0). Canfield estimates total e-discovery costs through trial in the range of $1.4M to $1.8M.
Formal document requests have not yet been served — we anticipate serving them in Q4 after the motion to dismiss is resolved or progresses — but the team is preparing GenomeDx's requests for production (47 RFPs planned) and anticipating the scope of Helios's requests. Privilege review protocols are being established in coordination with Canfield.
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**7. Expert Identification — Preliminary**
The team has begun identifying potential technical and damages experts. For the technical expert (covering genomic classification methods, infringement, and validity), we are evaluating Dr. Franklin Ogawa, Professor of Computational Oncology at Stanford University, among other candidates. For damages, we are considering Dr. Louise Tremaine, Managing Director at Ashworth Economics Group LLC in Chicago.
Formal retention will occur in Q1–Q2 2026 in advance of the May 15, 2026 expert report deadline. We will provide a detailed recommendation memorandum with our assessments of each candidate in the coming months.
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**8. Protective Order Negotiations**
The parties have begun discussing the need for a protective order. Given that both sides' document productions will contain trade secrets and highly confidential technical information — including Helios's ProstaSignal™ algorithm architecture and GenomeDx's Decipher® classifier details — a robust protective order is essential. We anticipate negotiating a two-tier structure (Confidential and Highly Confidential — Attorneys' Eyes Only) and expect to have it agreed upon and entered by the Court before substantive document production begins.
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**9. Summary of Legal Fees and Costs Incurred to Date**
From the date of our engagement (March 12, 2025) through September 30, 2025, fees and costs have been incurred across the following phases: pre-filing investigation, claim charting, and complaint drafting; pleadings (including the answer to Helios's counterclaims); case management conference and scheduling; preparation of initial disclosures; preliminary claim construction analysis; preparation to oppose the motion to dismiss; and e-discovery setup and document collection (including Canfield costs). Alan Ngo is available to discuss detailed billing questions at any time.
As a reference point, the overall litigation budget set forth in the March 12, 2025 engagement letter was $6.8M to $9.2M through trial. Spending to date is tracking within the projected ranges for this phase of the case. For reference, current hourly rates for the core team are: Catherine Bloom ($1,350/hr), Alan Ngo ($1,275/hr), Peter Vassiliev ($875/hr), and Wendy Schultz ($725/hr).
Regarding insurance, we continue to coordinate with Greystone Specialty Insurance Co. on coverage reporting under the IP enforcement insurance policy (Policy No. GSI-IP-2024-07812). As a reminder, the policy provides a $10M coverage limit with a $2.5M deductible and 80/20 co-insurance above the deductible. The policy period runs through December 31, 2025, and renewal discussions are underway. Costs incurred to date remain within the deductible.
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**10. Next Steps / Outlook for Q4 2025**
Looking ahead, our priorities for Q4 2025 are as follows:
- **File opposition to Helios's motion to dismiss** (due November 3, 2025) and await the Court's ruling. - **Finalize and enter the protective order** with Helios. - **Begin serving document requests and interrogatories** once the protective order is in place. - **Continue claim construction analysis and preparation** toward the Joint Claim Construction and Prehearing Statement. - **Begin expert identification and vetting in earnest**, building toward formal retention in early 2026. - **Continue monitoring ProstaSignal™ commercial activity.** Since its launch on October 7, 2024, Helios has performed approximately 8,400 tests at an average reimbursement of $3,820 per test through approximately March 2025, generating estimated revenue of approximately $32,088,000. GenomeDx's market share has declined from approximately 74% to approximately 68% over that period.
On the damages front, updated estimates are as follows: our lost-profits theory currently estimates approximately $18.5M, based on approximately 6,100 diverted tests at GenomeDx's average reimbursement of $4,210 per test and a 72% incremental margin. Our alternative reasonable-royalty estimate is approximately $5.8M, calculated at an 18% rate on Helios's revenue (based on the 15% rate in the Veridian license, adjusted upward for the litigation context). These figures will continue to be refined as discovery progresses and as we retain our damages expert.
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**11. Closing**
I would welcome the opportunity to schedule a call with both of you to discuss any questions you may have regarding the foregoing, including our claim construction strategy, our approach to the § 101 motion opposition, and the damages analysis. Peter Vassiliev and Wendy Schultz are also available to address any detailed technical or procedural questions.
Please note that this communication is protected by the attorney-client privilege and the work-product doctrine and should be treated as strictly confidential.
Thank you for your continued confidence in our team. We will continue to keep you apprised of developments as they occur.
Warm regards,
**Catherine Bloom** Partner, intellectual Property Group Calderwood & Harkness LLP 555 Mission Street, Suite 3100 San Francisco, CA 94105 T: (415) 555-7200 E: cbloom@calderwoodharkness.com
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